Interior scandal: Rated G(reen)

During the waning years of the Bush administration, officials with the U.S. Department of Interior got a little too cozy with -- hold on to your Sierra Club card -- environmentalists. So says a recent report by the department's Office of Inspector General.

The investigation looked at the National Landscape Conservation System, which was created in 2000 to protect some 27 million acres of land. This spring, Congress passed a law making the system permanent.

The Inspector General found that "numerous activities and communication took place between NLCS officials and NGOs" while that law was being drafted. They included:

• NLCS Division Chief Jeff Jarvis asked one of the environmental groups lobbying for the law whether it was possible "to add a few small areas to the legislation."

• BLM officials edited a brochure and helped create a fact-sheet on the NLCS that were later used during the lobbying process.

That, according to the Oct. 2 report, "gave the appearance of federal employees being less than objective and created the potential for conflicts of interest or violations of law." Most notably, it appeared as if government employees were trying to influence legislation.

In the end, the investigation concluded that despite the ethical fuzziness, no criminal activity had occurred. That didn't stop Rep. Rob Bishop, R-Utah -- who in 2008 raised concerns about the NLCS to the investigators -- from claiming vindication.

Bishop chairs the congressional Western Caucus, a conservative group that champions private property rights, and he has consistently blasted federal efforts to increase land protections or toughen regulations on gas and oil and other industries. He told Congressional Quarterly that his scrutiny of Interior is not over, and that his next target is the National Park Service, which received a bundle of cash in the stimulus package. Bishop and other Republican congressmen have questioned the role of National Parks Conservation Association lobbyist Craig Obey, who happens to be the son of Rep. David Obey, D-Wis., the chairman of the House Appropriations Committee.

But the enviro-agency dalliances highlighted by the investigation look downright G-rated compared to the Interior Department's cavorting with industry. Last year, the Inspector General found that staffers of Interior's Mineral Management Service were literally in bed with executives from the oil companies they were supposed to be auditing. That is, when their bosses weren't demanding oral sex from them, or sniffing meth off their toaster ovens. Soap operatics aside, though, that investigation highlighted just how dysfunctional the program overseen by these party animals really was. Royalty in Kind -- wherein royalties on oil and gas plucked from public land are paid in oil and gas -- was first implemented because it could net more money for the feds than traditional royalties. But the Inspector General found that it was more vulnerable to faulty oversight than the conventional system of collecting cash royalties.

In response, now-Interior Secretary Ken Salazar performed one of his most significant acts yet: On Sept. 16, he began phasing out the Royalty In Kind program.

Salazar didn't stop there. On Oct. 20, he ordered an investigation into "a set of favorable conditions and low royalty rates" offered to energy companies holding oil shale leases just days before the end of the Bush administration. That announcement came just about a month after news broke that the Justice Department was investigating whether former Interior Secretary Gale Norton's department gave preferential treatment to Royal Dutch Shell. In 2006, Interior awarded oil shale leases to a subsidiary of the company. Just two months later, Norton resigned from her position at Interior and soon after took a position in Shell's oil shale department.

Amid all the corruption clatter, one piece of news from Interior went largely unnoticed. On Sept. 21, Salazar announced Order 3288. Its purpose? "To enhance and promote an ethical culture throughout the Department of the Interior."